Rate Increases Could Crimp
TIPS-Linked Mutual Funds

By

Theo Francis Staff Reporter of The Wall Street Journal

Updated Nov. 15, 2002 12:01 a.m. ET

Times couldn't be better for mutual funds that invest in U.S. government securities pegged to inflation. But investors tempted to join the fun now should consider that future interest-rate increases could put an end to the good times.

A year ago, funds specializing in Treasury Inflation Protected Securities, or TIPS, boasted just $2.8 billion in combined assets. Today, their assets have ballooned to $11 billion, as investors have...